News
The Irish Commission for Aviation Regulation has published its draft decision on the maximum level of Airport Charges at Dublin Airport over the 2020-24 regulatory period. For the allowed rate of return on capital, the authority has relied on a report prepared by Swiss Economics.
Our report reflects that financial markets are currently undergoing exceptional times. Real government bond yields have fallen to a historically low level in the past couple of years, suggesting that the real expected return from risk-free assets is currently negative. Traditional approaches to estimating the cost of capital may fail to adequately capture the peculiarities of this new market environment. Hence, we assessed whether the ECB’s recent halt of quantitative easing is likely to have a significant effect on the market and analysed whether financial markets expect bond yields to rise again in the near future. Also, we considered evidence that expectations on equity returns may be more stable over time than underlying risk premia, indicating a so-called Total Market Return approach may be preferred over the traditional Equity Risk Premium approach to estimate the cost of equity.
The full report can be downloaded from the Commission for Aviation Regulation’s website.
Does digitalization require new rules for the international taxation of companies? OECD and the European Union try to change international tax law in favour of countries where consumption takes place.
In der aktuellen Ausgabe der Zeitschrift für Europarecht hat Christian Jaag zusammen mit Luzius Cavelti einen Leitartikel zum Thema «Die Bedeutung der Digitalisierung für das internationale Unternehmenssteuerrecht» publiziert.
At the inaugural Who's Who Legal Switzerland Awards ceremony on April 3, 2019, in Zurich, Christian Jaag received the Competition Economists Switzerland Expert of the Year 2019 Award. Each year Who's Who Legal presents awards to individuals that have performed exceptionally well in each of the featured practice areas according to Who's Who Legal's research.
Who's Who Legal finds that "at Swiss Economics, Christian Jaag is definitely a brilliant economist to work with according to sources. They note he is the strongest competition economist in Switzerland and enjoys a very good reputation for his work in the field."
To the article.
Michael Funk recently gave his interpretation of the influential Post Denmark II decision to an audience at the Annual Conference of the Leibniz ScienceCampus 2019 Mannheim Centre for Competition and Innovation (MaCCI).
At the Annual Conference of Mannheim Centre for Competition and Innovation, Michael Funk presented a Swiss Economics research paper on competition economics. He argues that a notional as-efficient competitor, often used in the economic assessment of abuse of dominance cases, can be too efficient to be of relevance in practice. In particular, joint costs, which are required to comply with a Universal Service Obligation, should not be considered sunk when determining the cost structure for other services or else there is a risk of imposing unrealistic efficiency standards on competitors.
Bundesnetzagentur published the latest benchmarking report by Swiss Economics. In the report, methodical details are carried out and the results are documented.
Swiss Economics, together with SUMICSID and IAEW carried out an efficiency comparison of electricity distribution system operators in the third regulatory period. Analyzed in detail was, among others, the illustration of decentralized generation. The published draft contains all important methodical aspects and documents the results. For the benchmarking, around 200 system operators were compared based on their cost efficiency. The final version will follow after the system operators have had the opportunity to comment on the draft.
Swiss Economics and COMCO present a case at the Annual conference of the Association of Competition Economists (ACE)
Screening tools can mitigate the dependency on whistleblowers and leniency applicants and enable the authorities to fight against bid rigging cartels proactively. The Investigation "See Gaster" in Switzerland was triggered by an ex-ante screening method developed by the Swiss Competition Commission. In the session, Yavuz Karagök (ComCo), Frode Steen (Norwegian School of Economics) and Michael Funk (Swiss Economics) discuss the strengths and weaknesses of screening methods with a concrete example.
Swiss Economics analyses the impact of the sharing economy on public transport.
Swiss Economics has investigated the impact of the sharing economy on public transport together with the University of Lucerne. Based on our discrete choice experiments we conclude that regulations are critical for the expected modal split.
Samuel Rutz's article «Screening for «Bid Rigging Does it Work?» was recently published in the Journal of Competition Law & Economics.
The article discusses a screening method to detect bid rigging cartels. Based on the findings of the authors, the Swiss Competition Commission (COMCO) opened an investigation and sanctioned several firms for bid rigging.
Christian Jaag was named «leading expert» in the categories Legal Competition and Consulting Experts. Samuel Rutz was honoured as a «future leader» in the categories of Competition and Consulting Experts.
Dr. Christian Jaag and Dr. Samuel Rutz have recently been featured in Who's Who Legal 2018.
Christian is listed in Who's Who Legal: Competition as a leading economist. WWL says: «Christian Jaag is a superb competition economist who is regularly called on to advise both public and private-sector clients on strategy, regulation and policy.»In addition, he is listed in Who's Who Legal: Switzerland. WWL writes: «Christian Jaag is widely recognised as «a leading competition economist» and impresses peers with his «highly creative, precise and hands-on approach», as well as his «impressive theoretical and practical skills». Lastly, Christian is listed in Who's Who: Consulting Experts.
To Christian's biography on WWL
Samuel is listed as a future leader in Who's Who Legal: Competition and Who's Who Legal: Consulting Experts.
The article «The more economic approach to predatory pricing» was recently published in the Journal of Competition Law & Economics.
Abstract: The «more economic approach» was introduced to antitrust to achieve a more effect-based and theoretically grounded enforcement. However, related to predatory pricing it resulted in systematic over- and under-enforcement: Economic theory does not require dominance for predation to be a rational (and harmful) strategy, although an ex-ante dominant firm would often refrain from predation. Hence, within the current legal framework which requires dominance for antitrust to apply, a more effect-based and theoretically grounded antitrust enforcement cannot pursue harmful predation. Therefore, we suggest separating predatory pricing from the exclusionary abuse of a dominant firm, both legally and analytically. Instead, predatory pricing should be analyzed along the same logic as a merger. In particular, we argue that three elements from merger control should be adopted: in the absence of dominance, market share and/or turnover thresholds may serve as a de minimis rule; recoupment should be analyzed similarly to the competitive effect of a merger between the predator and its prey, and a stronger efficiency defence should be established.
The partnership with OCA strengthens Swiss Economics' competencies in the areas of calculation of damages. OCA will also allow us to more effectively support clients in multinational and multilingual disputes.
Swiss Economics is delighted to announce the recently established partnership with French audit and consulting firm OCA. This new collaboration strengthens our capacity to offer multi-jurisdictional and multilingual dispute resolution services.
OCA has successfully assisted its clients during commercial and financial arbitration and litigation across various countries. The firm's technical capabilities in the area of Corporate Finance and Valuation perfectly complement Swiss Economics' skills in Competition Economics and Industrial Organisation. In collaboration with OCA, we are able to offer our clients both, top-down empirical and conceptual economic evidence as well as detailed bottom-up asset valuation, leading to even more robust results.
In addition, the partnership will allow us to ramp up large-scale case teams proficient in German, French, and English and be able to provide our clients with rigorous analysis under tight time constraints.
For more information, please contact Swiss Economics Managing Partner Christian Jaag or OCA Chairman Mikaël Ouaniche.
We welcome two new team members.
Melanie Häner is a Consultant working on economic policy and competition projects
A lecture by Christian Jaag.
A lecture by Christian Jaag.
Swiss Competition Commission (COMCO) cleared the transaction Sunrise | Liberty Global. Swiss Economics accompanied the examination from the outset with economic expertise.
Swiss Economics unterstütze Sunrise in diesem Verfahren in enger Zusammenarbeit mit der Anwaltskanzlei Lenz & Staehelin. Unser Team umfasste Samuel Rutz, Michael Funk, Matthias Hafner und Christian Jaag.
Swiss Economics hatte Sunrise bereits im letztjährigen Fusionskontrollverfahren bezüglich der umgekehrten Transaktion erfolgreich unterstützt. Schon damals hatte die WEKO den Zusammenschluss nach vertiefter Prüfung bedingungslos freigegeben. Anschliessend lehnte jedoch die Mehrheit der Aktionäre/innen die Übernahme ab. Nach erneuter Prüfung kam die WEKO zum Schluss, dass die Marktverhältnisse seither weitgehend unverändert blieben.
Who’s Who Legal 2020 featured Samuel Rutz, Michael Funk and Christian Jaag for their outstanding work in competition economics.
Samuel Rutz is mentioned in the following categories:
- - Competition - Economists
- - Experts - Economics - Competition Economists
WWL says: Samuel Rutz is a well-recognised figure in the Swiss market who is commended for his profound knowledge of competition regulation and policy.
Michael Funk is mentioned in the following categories:
- - Competition Future Leaders - Economists
- - Experts - Economics - Competition Economists - Future Leaders
WWL says: Michael Funk receives widespread commendations for his excellent practice, which sees him provide commercially astute analysis on competition policy issues.
Christian Jaag is mentioned in the following categories:
- - Competition - Economists
- - Experts - Economics - Competition Economists
- - Switzerland - Competition Economists
WWL says: Christian Jaag is "highly recommended" as "one of the very best competition economists in Switzerland". Peers and clients say: "Christian is brilliant at connecting academic and abstract thinking to concrete business needs."
Swiss Economics Principal Tobias Binz discusses this question in an article published in the latest issue of Competition and Regulation in Network Industries.
He uses a microeconomic framework to illustrate how firm and market characteristics determine the extent to which economy-wide demand shocks are translated into profit fluctuations. The findings may help regulators to improve the composition of the peer groups that are used to assess airports' Beta risk.
The published article can be accessed online through Competition and Regulation in Network Industries' website. A working paper version is available here.
The Fair Price Initiative aims to introduce the concept of "relative market power" to Swiss competition law. However, from an economic point of view, the concept is not an appropriate instrument to combat the high prices in Switzerland.
Read more (German)
Swiss Economics was commissioned by the Swiss State Secretariat for Economic Affairs (SECO) to conduct a meta-analysis on the effectiveness of non-pharmaceutical measures to contain the spread of the coronavirus.
On the 27th of April, two months after they were first introduced, the federal government started to relax the measures to contain the spread of the new coronavirus (SARS-CoV-2). It cannot be ruled out that this easing will lead to a renewed increase in infection rates or even a second wave of infections.
The Swiss Economics study provides an overview of available evidence on the effectiveness of various measures and indicates which measures would be particularly appropriate to implement in case infection rates start to increase again.
Swiss Economics supported the Irish Commission for Aviation Regulation in determining capital costs over the 2020-24 regulatory period. The Appeals Panel has decided in favour of the Commission of Aviation Regulation regarding appeals about capital costs.
Swiss Economics supported the Irish Commission for Aviation Regulation (CAR) in determining capital costs (WACC) over the 2020-24 regulatory period. After CAR published its projections, appeals have been made by Dublin Airport and Raynair. Among other points, the appeals targeted capital costs. An independent panel has now rejected most points of these appeals including the capital costs. CAR welcomes the decision of the panel and its argumentation. The panel stated that the numbers rely on the evaluation of the current economic conditions and conform with statutory requirements.
Press Release from the Commission for Aviation Regulation (2 June 2020)
Sunrise claims damages of CHF 350 million from Swisscom for abuse of its dominant position in the ADSL wholesale sector. Swiss Economics has supported Sunrise in quantifying the harm from the infringement.
Extract from the press release:
Swisscom abused its dominant market position from 2001 to 2007, and unlawfully hindered the competition with its pricing policy for ADSL services. The former monopolist practised a margin squeeze which made it impossible for Sunrise as a wholesale customer, to operate its ADSL business profitably.
This was confirmed by the Federal Supreme Court on December 9, 2019 after a ten-year appeal process. Swisscom was sentenced to a fine of CHF 186 million.
On the basis of this ruling, Sunrise is claiming damages of CHF 350 million plus interest from Swisscom.
Sunrise commissioned the renowned consulting company Swiss Economics to calculate the damage to Sunrise. This is due to the loss of market share and prevented gain in the broadband Internet market and adjacent markets (landline and mobile communications). The total amounts to CHF 457 million, a greater number than originally assumed. As a precautionary measure to prevent limitation, Sunrise had interrupted the statute of limitation for a claim of CHF 350 million and is filing a claim for damages of CHF 350 million plus interest with the Bern Commercial Court today.
Our team includes Christian Jaag, Michael Funk and Matthias Hafner.
The Swiss Competition Commission has approved a merger between Swiss railway company SBB Cargo and several road freight firms without imposing any remedies. Swiss Economics provided economic evidence related to efficiencies arising from the merger to inform the Commission's thinking.
The Competition Commission found that the investment of Swiss Combi (a joint venture of Planzer, Camion-Transport, Galliker, and Bertschi) in SBB Cargo does not eliminate competition in any of the concerned markets. The decision will increase the economic viability of the Swiss rail freight business and will lead to innovative new services being made available.
During Phase II of the investigation, Swiss Economics, in collaboration with SBB Cargo and law firm Walder Wyss, produced detailed economic evidence of the investment's effects on competition and welfare. The engagement was led by Samuel Rutz, Michael Funk, and Tobias Binz.
We welcome our new team member Dr. Ann-Kathrin Crede, focusing on Behavioral Economics.
Ann-Kathrin Crede works as an economist with a focus on Behavioral Economics. She graduated with her PhD in Behavioral and Experimental Economics at the University of Bern and gained experience in running laboratory and field experiments and in applying behavioural insights to organizations during her time as a research assistant.
She holds a Master’s degree in Economics from the University of Passau and a Bachelor’s degree in Business & Economics and French from the University of Kassel.
The French Autorité de régulation des transports (ART) has published its opinion on the appropriate level of the Weighted Average Cost of Capital (WACC) for Parisian airports Charles de Gaulle, Orly, and Le Bourget.
The opinion will play a central role in the negotiations between Aéroports de Paris Group and the French government regarding the Economic Regulation Agreement over the 2021-25 period.
For the assessment of Beta risk, the regulator relied on evidence provided by Swiss Economics. Our contribution was twofold. First, we analysed what drives airports’ systematic risk and defined risk categories for airports under ART’s mandate. Second, we identified valid comparator airports and determined the level of their Beta risk, using regression analysis of stock returns. Our reports on drivers of Beta risk and comparator Betas can be downloaded directly from ART’s website:
Team members of Swiss Economics awarded by Who is Who Switzerland 2020.
Christian Jaag and Samuel Rutz are highlighted for their excellent work as Competition Economists:
“At Swiss Economics, Christian Jaag has an exemplary ability ‘to convey and explain highly complex matters’ to peers and clients alike. His knowledge and skillset make him a ‘brilliant economist to work with’ and one of the leading names in Switzerland.”
“Samuel Rutz of Swiss Economics has wide-ranging knowledge and extensive experience of competition regulation and policy matters in Switzerland.”
#whoswholegal #wwl #competition
Who's Who Legal and Client Choice honoured Christian Jaag as the best Competition Economist in Switzerland in 2020.
At the inaugural Who's Who Legal Switzerland Awards ceremony on February 12, 2020, in Zurich Christian Jaag received the Competition Economist of the Year 2020 Award. Each year Who's Who Legal presents awards to individuals that have performed exceptionally well in each of the featured practice areas according to Who's Who Legal's research.
To the WWL Switzerland award winners
In addition, Christian Jaag was recently rewarded with the Lexology Client Choice award also for his work as a Competition Economist.
Established in 2005, Client Choice recognises those individuals around the world that stand apart for the excellent client care they provide and the quality of their service. The criteria for this recognition focus on the ability to add real value to clients’ businesses above and beyond the other players in the market.
The World Economic Forum (WEF) attracted not only politicians, managers and scientists to Davos but also Blockchain experts, start-ups and investors. Swiss Economics was delighted to exchange views with them.
During the World Economic Forum (WEF), the incubation space provider of the largest Swiss Blockchain Venture Capitalist, CV Labs, organized several events in Davos designed to showcase and discuss the Blockchain ecosystem. Since Christian Jaag, Matthias Hafner and Jan Christoph Schlegel are mentoring start-ups from the CV Labs incubation program, we were happy to see them pitch and progress, and to exchange views about current topics in the Blockchain ecosystem. Discussions included successful projects Swiss Economics supported in the past. CV VC proudly stated that there are now over 800 Blockchain companies in Switzerland and Lichtenstein. Swiss Economics is looking forward to new exciting collaborations in the Blockchain industry.
Swiss Economics Principal Michael Funk presents his views on the importance of economic analyses in antitrust proceedings during the “Swiss Network on Public Economics”-Workshop at ETH Zurich
At the first workshop of the "Swiss Network on Public Economics" Michael Funk presented a paper on the importance of economic analyses in antitrust proceedings. The focus was on the most recent development in Switzerland, which has resulted in the marginalisation of the economy. This development contrasts with the development in the European Union, where the negative effects of a violation of antitrust law are generally the focus of the proceedings.
The aim of the newly founded network is to strengthen relations between academics and practitioners at universities, in public administrations, the Swiss National Bank and private institutions.
Swiss Economics supports the second incubation program of the largest investment ecosystem for start-ups using the Blockchain technology in Zug, Switzerland (CV Labs Incubation Program).
Recently, Christian Jaag and Matthias Hafner met the start-ups and presented their expertise and experience in platform and monetary economics for token-based projects. In their workshop they discussed characteristics, considerations and decisions to be made when designing token-based ecosystems.